Hundreds of civil-service jobs have been relocated to Birmingham from London, the Chancellor announced.

The transfer is part of a major efficiency drive which involves moving 7,800 government workers out of the capital and the South-east.

The Department for Culture, Media and Sport is relocating 200 Gambling Commission posts to Birmingham.

It is also moving 200 jobs from the Big Lottery Fund to Birmingham and Newcastle. The relocations follow an investigation by Sir Michael Lyons, the former Chief Executive of Birmingham City Council, which concluded major savings could be made by transferring jobs out of London. The inquiry was commissioned by Gordon Brown.

The Government is also planning to slash more than 100,000 civil servants' jobs in the next few years, including 30,000 at the Department for Work and Pensions.

The money saved will be put directly into front-line servicesRecent reports have suggested that the job-shedding was behind schedule, as Whitehall mandarins rebelled against demands to reduce staff or relocate out of the South.

But Gordon Brown said pounds 2 billion of savings had already been made and thousands more civil service jobs had been cut than expected at this stage.

In a document published by the Treasury to accompany the Budget, it was revealed that the Department of the Environment, Food and Rural Affairs is cutting 200 further jobs. The Department of Trade and Industry will have cut 560 posts by the end of this month, while an extra 400 jobs will go from the Inland Revenue andCustoms. However, Mr Brown faces stiff opposition from civil service unions.

Mark Serwotka, leader of the Public and CommercialServices Union (PCS) said: 'In last year's budget, we had the day of the long knives as the Chancellor kicked off the crude game of who could cut the most civil-service jobs between the Government and the Tories.

'Now, this year, we have bonfire of the quangos. There was a time when the only worry thousands of hardworking civil and public servants had on budget day was whether petrol or taxes would go up, nowadays the worry is whether they will have a job by the end of it.

'Yet again, we see theChancellor trying to have his cake and eat it. On the one hand, the Chancellor announces welcome proposals about closing tax loopholes as well as the extension of projects, such as the New Deal, and then on the other he gives an update on how plans are progressing in cutting the very people who deliver them.'

The Treasury also reported that plans had been drawn up to cut sickness absence in the public sector by almost a third.

There will be systematic checks on workers persistently taking time off and tougher sanctions for those accused ofabusing the system. Around 4,300 jobs will have been relocated out of London and the South-east by the end of the month and plans have been agreed for a further 3,500.

The Department of Health is moving 500 staff to Yorkshire, where the Department for Food, the Environment and Rural Affairs is also moving 300 people.